May 22--Investors hammered GameStop Corp. on Thursday after the Grapevine-based video game retailer said second-quarter sales will be lower than expected, pushing the stock down about 15 percent.

But chief executive Dan DeMatteo said any concerns about the recession finally chomping on the heretofore robust gaming industry are misplaced.

Rather, he said, the projected second-quarter results look bad only compared with the unusually strong second quarter of 2008.

Indeed, he expects things to pick back up later this year when a slate of blockbuster games is scheduled for release.

"The economic environment has much less impact in this video entertainment category than the product cycle," he said.

GameStop actually reported solid first-quarter results Thursday.

The company had sales in the quarter of $1.98 billion, up 9.2 percent from $1.81 billion in the first quarter of 2008.

That resulted in a profit of $70.4 million, or 42 cents per share, up 13.4 percent from $62.1 million, or 37 cents per share, in the first quarter of 2008.

In fact, market research firm NPD Group said Wednesday that more Americans played a video game in the past six months (63 percent) than went to a movie theater (53 percent).

But GameStop's second-quarter outlook sent investors scurrying, as shares of the company fell $4.09, or 15.5 percent, to close at $22.38 in unusually heavy trading.

GameStop expects same-store sales to decline in the range of 8 percent to 11 percent in the second quarter, after a 1.5 percent dip in the first quarter.

Overall, earnings per share are expected to be in the range of 28 cents per share to 33 cents per share in the second quarter, down from 34 cents per share in the second quarter of 2008.

DeMatteo said that while game software sales seem to be recession-resistant, the economy is squeezing sales of game consoles, and said he expects Sony and Nintendo to lower the price on the PlayStation 3 and Wii later this year.

Despite the tempered second-quarter outlook, GameStop reiterated its full-year expectations.

The company said earnings will be in the range of $2.83 per share to $2.93 per share, an increase of 18 percent to 22 percent over 2008.

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